Mining conglomerate
Net proceeds are mainly earmarked for US$300 million worth of existing debentures that mature in June. Those notes have been bearing interest at 8.125% annually, notably higher than the 6% coupon rate attached to the new ones.
The notes will be redeemable any time prior to maturity, which is scheduled for mid-October 2015. An early redemption requires the repayment of principal plus a make-whole premium.
The debt-financing all but ensures that Noranda surpasses its goal of raising $1 billion in new capital. The company embarked on the program to ensure sufficient liquidity to deal with its heavy debt. At mid-year, the company owed $4.5 billion, including $567 million, then due in one year’s time.
Working capital stood at $1.1 billion.
Citigroup and Barclay’s Capital are co-leading the debt financing.
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